You can get a better Home Loan Interest Rate if you opt for Home Loan Balance Transfer

Home loan balance transfer is the process of transferring an existing loan to another bank or NBFC, because the borrower is getting better rates or services there. After demonetization a lot of banks have reduced their home loan interest rates. Leading this set of banks is SBI who has reduced their housing loan interest rates by 50 basis points making their current rate is 8.5 per cent. Following SBI other banks and NBFCs too have reduced their rates, one of whom has reduced its housing loan interest rates by 45 basis points. These rate cuts will mainly benefit new borrowers. But this doesn’t mean that existing borrowers cannot benefit from these reduced rates at all.  This slashing of rates makes this the best time for home loan transfer.

The cuts in home loan interest rates are mainly benefiting borrowers who have taken their loan after April’16. But what about borrowers who have taken their loan before then? Well, home loan balance transfer is their best bet and here’s how you can do it in just five simple steps.

1.   Step 1- Analysis of home loan transfer: Analyse and understand why you really need to transfer your home loan. It could be because your bank is offering really high floating interest rates, they’re unwilling to negotiate better terms with you or you’re unhappy with the service of your provider. You also need to research about which provider you want to transfer your loan to. All this should take you very little time with the right research of course.

2.  Step 2- Acquiring all necessary document: Firstly, you will need to get an NOC (No Objection Certificate) from your current bank. The other documents you will require are, a foreclosure letter, a payment history statement and some more documents based on the requirements of the lender you’re transferring your loan to. The acquiring of all these documents can easily take up to three week, your current bank may try to negotiate better terms with you during this process, seeing that you’re trying to transfer your home loan.

3.  Step 3- Applying for the new loan: On receiving all the necessary documents, you will approach your new bank for your new loan. You will require an NOC from your builder or housing society to do the same.

4.  Step 4- Credit approval: Your new bank will review all your documents and after studying your credit score and eligibility sanction your balance transfer.

5.  Step 5- Time to decide: On approval, your new bank will send your new home loan interest rates, along with the terms and conditions. You have to decide whether the new rates are worth transferring your home loan for, or you want to stick to your existing home loan.